Time for Ceylon Arrack?

Scotch whisky, French Champagne and Ceylon Tea are globally recognised brands built around geographical identity, heritage and authenticity. Their names command premium prices, generate billions of dollars in revenue and create economic opportunities far beyond the industries that produce them. The alcoholic beverages industry has an opportunity to follow a similar path which should be explored without prejudice.

International trade agreements recognise geographical indications (GIs), which protect products whose quality, reputation or characteristics are intrinsically linked to their place of origin. While whisky or sparkling wine can be produced elsewhere using similar ingredients and methods, producers cannot simply market their products as Scotch whisky or Champagne unless they meet the geographical and production requirements governing those names. Ceylon Tea is perhaps the best example of how Sri Lanka has successfully leveraged this principle to establish an internationally recognised identity.

Yet, remarkably, Sri Lanka has never made a serious strategic attempt to build a comparable global identity around Ceylon Arrack or Sri Lankan Arrack. Arrack is a distinctive spirit with deep historical roots across South Asia and Southeast Asia. However, the methods of distillation, raw materials and local traditions give different varieties their own character. Sri Lanka has a particularly rich heritage in this regard. Coconut arrack remains the most widely recognised variety, but Palmyrah arrack, produced for decades by cooperatives and distilleries in the Northern Province, represents another distinctive product with considerable potential.

The failure to develop this industry into a globally recognised brand may partly reflect the political and cultural sensitivities surrounding alcohol in a country that identifies strongly with its religious traditions. Successive governments have often approached the alcohol industry as something to be restricted rather than an economic sector that requires responsible regulation and strategic development. Restrictions such as the prohibition on alcohol sales on Poya days are symptomatic of this uneasy and counterintuitive relationship.

There is, of course, a legitimate need to regulate alcohol consumption and address its social consequences. But responsible regulation should not mean abandoning the economic opportunities presented by a well-established domestic industry. Nor should cultural sensitivities prevent Sri Lanka from developing an export-oriented strategy that creates employment, attracts investment and earns foreign exchange.

The economic numbers suggest that this is an opportunity worth pursuing. According to reported figures, domestic liquor production increased to 19.7 million absolute litres last year, up from 17.4 million litres a year earlier. The Finance Ministry has also reported that locally produced liquor generated 64% of the Rs. 213.4 billion in excise duty collected from the sector in 2024. Liquor accounted for 24.4% of the country's total excise revenue of Rs. 562.7 billion.

These figures demonstrate the scale of an industry that already makes a substantial contribution to Government revenue. Imagine what could be achieved if the same industry were supported by a coherent export strategy, international marketing and investment in product development.

The Government is well poised to explore the feasibility of securing geographical indication protection for Ceylon Arrack and developing internationally recognised standards governing its production, quality and authenticity. This should encompass the different varieties, including coconut and palmyrah arrack, while encouraging innovation in distillation, ageing, packaging and presentation. A strong national brand could also create opportunities for premium spirits and other locally produced alcoholic beverages.

Such a strategy would benefit farmers, local communities, cooperatives, manufacturers, exporters and tourism operators. It could also position Sri Lanka as a destination for premium spirits, much as Scotland has done with whisky.